New Delhi: Passenger vehicle (PV) wholesales in India witnessed the steepest decline in nearly 18 years, dropping by over 20% in May, as continued weakness in retail offtake forced manufacturers to cut production in order to adjust to market demand.
The PV sales declined for a seventh straight month in May from the year-ago month. In fact, barring October last year, when sales were up 1.55%, PV offtake has been in the negative in the ten months off the last 11 months. The dip last month is the worst since September 2001, when sales had dropped by 21.91%.
All major segments, including two-wheelers and commercial vehicles, witnessed a decline in sales in May, according to data released by the Society of Indian Automobile Manufacturers (SIAM). Vehicle sales across categories registered a decline of 8.62% to 20,86,358 units from 22,83,262 units in May 2018, it added.
"The downhill drive continues in May. Retail sales figures are comparatively better than wholesales which show that the industry is taking steps to cut production. Inventory correction is taking place. We have not witnessed such slowdown in the last 15 years," SIAM Director General Vishnu Mathur told reporters here.
With this kind of market situation, now is the time for the government to step in and come in with some steps to stimulate growth, he added. The government had helped the industry recover previously in 2011-12 and 2008-9 with various policy measures including cut in excise duty, Mathur said.
Terming the situation as "unprecedented", SIAM Deputy Director General Sugato Sen said the industry body has asked the government to reduce goods and services tax (GST) on all categories of vehicles from 28% to 18%.
